TWO major car brands are set to join forces to make EVs as they seek to head off aggressive competition from new rivals.
The companies, which also look likely to team up on AI tech, said the decision was motivated by facing “common challenges”.
Nissan and Honda are major players in the motor industry, with both sitting in the top 10 of the largest manufacturers in the world.
Barring the sales dominance of Toyota, the pair share a stranglehold on sections of the Asian market in particular, while also having sizeable European and US operations.
Now, some of those vast capabilities look set to be combined as the brands have suggested they will embark on a new joint project.
While an official announcement has not yet been made, bosses confirmed that a collaboration is being considered in the areas of “electrification and intelligence”.
This is understood to refer to EV manufacturing and AI-powered driverless technology.
The agreement comes in the face of stiff challenges from new Chinese rivals which are leading the way in the transition to electric cars.
Indeed, according to Investopedia, by the end of last year Chinese firm BYD, which made its UK debut in 2023, was snapping at Nissan’s heels for ninth in the table of the world’s largest carmakers.
In general, Japan, where both Honda and Nissan are based, has been more resistant than other G7 nations to adopt EVs, with a strong preference for hybrid models instead.
The latest data shows electric models making up just 1.7% of new sales in the country, compared to 5.3% in the US and as much as 20% in China.
This has seen Japanese brands pull away from full electrification while some, like Mistubishi, have withdrawn from the Chinese market altogether in the face of falling sales.
All that has led to the two brands seeking a more unconventional route to face down their heavily subsidised rivals from across the East China Sea.
Nissan’s chief executive, Makoto Uchida, said: “It is important to prepare for the increasing pace of transformation in mobility in the mid-to-long-term, and it is significant that we have reached this agreement based on a mutual understanding that Honda and Nissan face common challenges.
“We are not competing only with the traditional car makers, but also with new players.
“We cannot win the competition as long as we stick to conventional wisdom and traditional approach.”
This was echoed by Honda president Toshihiro Mibe, who called the shift towards Chinese cars a “once-in-a-century transformation in the automotive industry”.
The move was hailed by experts, with automotive analyst Chris Redl telling Reuters: “Even though they were very fierce rivals historically, it makes more sense for Nissan to get together with a Japanese company like Honda, rather than having these cultural wars with an alliance partner like Renault.”